You can create custom textures for clothing using Adobe Photoshop or another image editor. For detailed information and templates, please visit http://wiki.secondlife.com/wiki/Clothing_Tutorials and http://www.squidoo.com/secondlifeclothingtutorials.

You may also want to see "Making custom clothing for Second Life or OpenSim" at http://www.youtube.com/watch?v=mT5ULiZ5pqA.

Continue to Chapter 4. Creating Avatars - Customizing Animations with an Animation Overrider.